Tom Hicks’ Sports Group: Half Billion Dollar Deadbeats

I kind of went hog wild on the franchise devaluation thing around here last week. Some agreed, others felt I (and my pinch hitting friend Ethan) went a bit overboard. Well, let’s throw this bit of news into the pot and see what cooks up:

Private equity legend Tom Hicks’ sports team holding company has defaulted on more than $500 million in loans, a source has told FINalternatives.

Hicks Sports Group, which owns baseball’s Texas Rangers and hockey’s Dallas Stars, failed to make its interest payment on $525 million in syndicated bank loans on Monday. The group is now in talks with its lenders about a forbearance.

Hicks made his billions on leveraged buyouts, founding private equity firm Hicks Muse Tate & Furst, now HM Capital, in 1989. He retired from the firm in 2006.

According to the source, who has seen documents relating to the loans, Hicks defaulted on a $350 million bank term loan, $100 million second-lien loan and a $75 million revolving credit facility. A spokesman for Hicks Sports declined to comment.

Hmmm . . . I wonder what the collateral was for those loans. I wonder how much that collateral will bring in what would be the functional equivalent of a foreclosure sale?

UPDATE: Hicks’ response to the banks: A plea for them to “be reasonable.” Reminds me of the Shmatte pleading for Tom to “look into ya heart!” when they were walking into the woods out at Miller’s Crossing. If that’s the best he’s got, he’s probably in some pretty big trouble.

HSG missed the payments just a few days ago (Tuesday), and yet Hicks talked about trying to get them to go along with “our proposal”, which, presumably would’ve taken several weeks to draft. Furthermore, we got the news last week that he’s looking to sell, essentially, half of his stake in the teams.

Then you read his comments how the two stadiums are Texas’s version of Carnegie Hall and Madison Square Garden and he seems like the owner of a jiffy-lube desperately trying to up-sell his customers.

Bottom line? HSG has seen this coming for a long time, which means they know that they’re in trouble. If any billionaires out there want to buy a team on the cheap, I’d hop on my Gulfstream jet and chart a course for Dallas ASAP.

A few months ago you riffed on Firefly/Serenity after I’d just spent the weekend re-watching the entire oeuvre for the 900th time. Today you do Miller’s Crossing after I just watched it last night for the 901st time. “Nobody knows anybody, not that well” -but you’re in my head Calcaterra! Back off!

@TC – From the Dmagazine link: “Before we go any further, we should probably explain to our British friends that Liverpool Football Club is not among the HSG holdings and neither are any of Hicks’ other business interests.”

Of course, this doesn’t mean that the purchase of Liverpool didn’t involve similarly bad choices, but at least it appears that it is safe so far. Hopefully, the EPL has a tighter rein on the capital requirements of its teams’ owners.

Fellows.. take a deep breath…Hicks will be able to renegotiate. What do the lenders want with a baseball team and its debts? Hicks isn’t stupid enough to put his cash flow assets—concessions, parking, etc.—in the same bundle with HSG.

He’s just like the rest of American’s who’re upside down in an asset, like their homes. Stop paying so the bank will actually re-negotiate with you. I wonder if he has to talk to a HUD Counselor before being considered for a modification?

I love the Internet. Anyone can call someone a douche and not even know what they’re talking about.

I paid $165 a month for a 2 1/2 room walk-up on Sheffield in 1979 when I graduated from college. The bed came out of the wall. No AC. Bad plumbing. I loved the place. It’s on the same side of the street as the ballpark, and the last I looked it’s still there, and almost as dumpy.

And by the way, the neighborhood is called Lakeview, not Wrigleyville.

Nobody called it Wrigleyville… I said it was across the street from Wrigley… technically a little bit down then next block from Wrigley…

And I may have been wrong about you, but I was typecasting the people in the area. Most of the people there NOW are about image and name brands. Your name reminded me of an old roommate I had who was very much that way.